The Supreme Court of British Columbia has ruled that Nicholas Vita, the former CEO of Columbia Care LLC and Columbia Care Inc., must pay approximately US$7.4 million under a personal loan guarantee associated with a corporate margin account.
The decision, issued in February, granted summary judgment in favour of Canaccord Genuity Corp. The brokerage sought to enforce a guarantee Vita signed in late 2019 after loans were extended through an offshore vehicle.
The dispute traces back to Columbia Care’s 2019 public listing in Canada. Following that transaction, Vita and then-chairman Michael Abbott explored borrowing against their shares. Because Vita is a U.S. citizen and the brokerage was not registered in the United States, a personal margin account could not be opened in his name.
Instead, the account was established under Amaranthus, an Isle of Man company beneficially owned by Abbott’s family trust.
Offshore Structure, Share Volatility, and Debt Acceleration
More than 10.6 million Columbia Care shares were initially deposited into the margin account at roughly US$6.50 per share. Loans totalling US$11.3 million were advanced. Months later, an additional US$2 million was borrowed, backed by further share deposits and a personal guarantee from Vita.
By early 2020, the account reportedly held approximately US$127 million in Columbia Care shares, against roughly US$14 million in debt.
However, as cannabis equity valuations declined, the value of the pledged shares fell sharply. By late 2020, both the collateral and outstanding debt had materially decreased, leaving millions still unpaid.
In 2024, Canaccord cancelled the margin facility and demanded repayment of roughly US$6.9 million. Legal action followed in early 2025 to enforce the guarantee.
Illegality Defence Rejected by the Court
Vita argued that the guarantee was unenforceable, claiming the structure amounted to an unlawful attempt to circumvent U.S. securities and anti-money laundering laws. He also raised limitation period arguments.
The court dismissed these claims. It found that Amaranthus, not Vita personally, was the legal account holder and borrower. Documentation consistently identified the offshore company as the pledger of shares and the recipient of loan proceeds.
Even if certain claims against the offshore entity had expired under limitation rules, the court concluded that Vita’s guarantee, which included principal debtor language, left him independently liable.
The ruling also ordered payment of interest and legal costs.
Investor Takeaways: Governance and Cross-Border Risk
The ruling points to several ongoing risks in the cannabis industry, especially the challenges that come with operating across international regulations. It also makes clear that using an offshore company does not automatically make a loan agreement invalid if the paperwork is properly set up. As capital markets tighten and cannabis share prices fluctuate, the case is a reminder that financing deals made during growth periods may produce lasting legal and financial consequences.
Rita Ferreira
Rita is a seasoned writer with over five years of experience, having worked with globally renowned platforms, including Forbes and Miister CBD. Her deep knowledge of hemp-related businesses and passion for delivering accurate and concise information distinguish her in the industry. Rita's contributions empower individuals and companies to navigate the complexities of the cannabis world, and her work remains a valuable resource for those seeking a deeper understanding of its potential.
